page 1 from dome to dome state & federal update don mcbeath director of government relations...
TRANSCRIPT
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FROM DOME TO DOME
STATE & FEDERAL UPDATE DON MCBEATH
Director of Government RelationsTexas Organization of Rural & Community
Hospitals
CROSSROADS CONFERENCE – June 6,2013
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YOUR HEALTH FUTURE IS IN THEIR HANDS!
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TEXAS LEGISLATIVE SESSION AT A GLANCE
Focus was on restoring budget cuts from two years ago – mostly in education.
Funding for water development – although the water is still murky.
Approving more than $1B in tax reductions – mostly to businesses.
Expanded the number of charter schools allowed.
Reductions in required school tests and graduation requirements.
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TEXAS LEGISLATIVE SESSION AT A GLANCE
Combined UT Pan American and UT Brownsville into UT Rio Grande Valley.
Lots of gun related and concealed carry bills – but no
concealed carry on campus.
House filed 4,323 bills and passed 885.
Senate filed 2,055 bills and passed 741.
Governor has vetoed 2 thus far.
He has until June 16 to veto bills and parts of the budget.
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STATE BUDGET SNAPSHOT
Final two year budget of almost $197 B compared to original current budget of $174 B.
They did add $7.2 B in state funds ($1 ($14.3 B with federal) to current budget to cover Medicaid and some school funding shortfalls.
Removed many of the one time accounting tricks from last session.
Increased revenue attributed to oil/gas boom and increased sales tax (and some revenue underestimates).
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STATE BUDGET
Biennium State GR Funds Total Budget*
2008-09 79,951,538,140 167,787,202,100
2010-11 80,614,169,010 182,187,966,800
2012-13 (original) 81,290,441,830 173,484,200,600
2012-13 (adjusted)88,504,993,972 187,829,669,182
2014-15 94,609,033,340 196,951,273,067
*Includes all sources - state general revenue, dedicated state, federal, & other
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MEDICAID EXPANSION
Texas Legislature snubbed the federal government on Medicaid expansion.
Governor Rick Perry started saying “no” to Medicaid expansion the day the US Supreme Court gave states an option (June 2012).
Chatter during session was Texas would find a way to expand but nothing passed except a law saying only the Legislature can expand Medicaid (and they didn’t).
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MEDICAID EXPANSION
ACA allows states to expand Medicaid to 133% of federal poverty level and feds pick up the tab (for three years and then covers 90%).
Medicaid expansion alone could drop Texas uninsured from 26% to 15-18%.
Full ACA with expansion, mandates and exchanges could drop Texas uninsured to less than 10%.
Expansion could give counties and hospitals districts a tax break with less uninsured/indigents and allow for funding of previously unmet needs.
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MEDICAID EXPANSION
Challenge is most Texans are “against Obama care” and don’t see the pocketbook advantage they could gain.
Supplemental federal funding to hospitals for uncompensated care (known as Disproportionate Share Hospital funding) will soon decrease under the assumption there is less uncompensated care because of Medicaid expansion – except Texas didn’t!
Lots of unknowns for Texas and none are financially good!
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OTHER BUDGET NEWS
Medicaid cost saving provisions – calls for Medicaid to find more than $400 M in savings (The Devil is in the rules).
Full funding of physician loan repayment program (150+ across the next two years).
Use of reserved trauma funds for DSH state match.
No increase in trauma fund payments to RACs and hospitals.
Another directive to address non-urgent ER use.
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MEDICAID HOSPITAL PAYMENTS
Rural hospitals will continue to be paid near their cost for services rather than standardized rates for inpatient.
New provision for rural hospitals calling for them to be paid under an alternative outpatient system (current single system for urban and rural tends to pay rural hospitals far less than cost).
No specific Medicaid rates cuts ordered in budget to hospitals, assisted livings, and other Medicaid providers.
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HOSPITAL NEONATAL/MATERNAL DESIGNATIONS
New three-tiered designation system for hospitals providing neonatal and maternal services.
▪ Hospitals must only provide the level of services associated with their
designation or transfer patient.
▪ Pursuit of designation is optional with hospital but must have to provide the
services.
Effective Aug 2017 for neonatal designations and Aug 2019 for maternal designations.
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THIS, THAT, & THE OTHER
SB 7 redesigns long-term and acute care services for the elderly, which are among the most costly services provided by Medicaid, with a shift to managed care.
Expanded GME slots.
Tightened EMS service license requirements including a local government determination of need.
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BILLS THAT DIED
A bill that would have barred any payment to a hospital for non-urgent care provided to a Medicaid recipient in hospital emergency room.
A bill to raise daily fine for hospital rule violations from $1,000 to $25,000.
A bill dictating nurse staffing ratios in various areas of a hospital.
Removed language in a bill that would have required three person patient movement teams on any patient over 50 pounds.
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REMAINING UNKNOWNS
Language from lots of dead bills was amended into other bills during the last week of session.
Veto period still open.
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HOW IS THE WEATHER IN DC?
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KILLING ‘EM IN CONGRESS
2% Medicare payment reduction to all providers started in April from sequestration.
Medicare bad debt allowance for hospitals reduced in early 2012 from 70 to 65% (100 to 65% for CAHs) - costing Texas rural hospitals collectively $2 M a year.
Medicare outpatient hold harmless eliminated in Jan 2013 - costing 50 Texas rural hospitals $10 M a year.
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KILLING ‘EM IN CONGRESS
RAC audits - more and more providers having to return Medicare payments without the ability to rebill.
Medicare payment contractor audits.
Medicare Value Based Purchasing started in Oct 2012 for hospitals - payments (except for CAH) now based on quality system which is expected to cost many hospitals 1-3% of their Medicare payment amount.
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KILLING ‘EM IN CONGRESS
Readmission penalties for hospitals started Oct 2012 (except for CAH) which will adversely impact rural hospitals who deal with a higher percentage of Medicare patients.
Electronic health records - Medicare bonus payments will not cover the cost of conversion for most hospitals and other providers.
Conversion to ICD10.
Doc-Fix (sustainable-growth-rate (SGR) formula …..again). 24.4% next time.
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LINGERING FEDERAL ISSUES
Medicare Low Volume Adjustment could expire in October collectively costing 80 Texas rural hospitals $45 M a year.
Medicare Low Volume Adjustment could expire in October collectively costing 15 Texas rural hospitals $3 million a year.
Medicare rural ambulance 3% payment bump could expire in December.
CAH mileage separation change on the table again.
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LINGERING FEDERAL ISSUES
Undocumented aliens – MMA Section 1011 funds gone since 2008 and never replaced – pushed further back by immigration debate.
Emergency Medical Treatment and Active Labor Act (EMTALA).
Expansion of Medicare Advantage and negative financial impact in rural areas.
DSH reduction under ACA.
Budget cuts.
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THEY DON’T GET IT!!!!
AN EXAMPLE:
New Texas MSA counties: Falls County, Hood County, Hudspeth County, Lynn County, Martin County, Newton County, Oldham County, Somervell County
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THE RURAL CHALLENGE AHEAD
Rural areas have less and less representation each time the State House, State Senate, and US Congress lines are redrawn.
Rural health providers must continue to educate lawmakers and staff that “rural is different” and deserves to be treated as such.
Remind them “one size fits all” does not work and why rural health care rules and payment methodologies must be different.
Rural health advocates must step up their efforts.
